You may have heard it said that donor-advised funds are the fastest growing charitable giving tool and rapidly becoming the most popular option available.
But why is that? How do they actually work? What does it take to open one? And are they only for millionaires?
Answering Your Questions on Donor-Advised Funds
In this interview with Institute for Justice, DonorsTrust vice president Peter Lipsett answers these questions and highlights some of the primary benefits of donor-advised funds such as simplicity, tax-savings, and privacy. He also breaks down the differences between check-book giving and opening a family foundation compared to a donor-advised fund.
In the same vein, he shares how donor-advised funds are well suited to all types of giving from annual gifts, to planned giving, whether you are just starting out with small gifts or thinking through your bequest. A donor-advised fund is the most flexible giving tool on the market, so it can adapt with your giving needs as you traverse life’s different seasons.
Melanie Hildreth, who leads the interview, understands these various benefits well. She is a member of DonorsTrust’s Novus Society for younger donors. She wrote about how giving through a donor-advised fund expanded her view of philanthropy in a recent post on our blog.
Towards the middle of the video, Peter speaks at the heart of the issue of why donor-advised funds are such strategic giving tools. It’s their ability to secure your charitable intentions.
Many non-profits talk about the importance of donor intent, but few do much to really carve out what this means and how they go about protecting it.
At DonorsTrust, donor intent is our highest priority.
It’s important, if you are looking at a donor-advised fund, to understand what their limitations are; what they will say, “No” to, because it is technically an irrevocable gift into the donor-advised fund. They can say, “No.” So you want to find a donor-advised fund where you are actually happy that they say, “No” because they are actually protecting your intent. –Peter Lipsett
At the end of the day, it’s your philanthropy, so it should go to the causes you care about to create the changes you want to see in the world.